Economy Dampens Back-To-School Spending in Military Families

Editor's note: The following analysis comes from a Financial Behaviors Index release.

Financial fears are evident among many military consumers as they prepare to roll out a variety of frugal spending strategies for the back-to-school shopping season.

The latest findings of the First Command Financial Behaviors Index reveal that roughly half of middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) are in the market for school clothes and supplies. And 40 percent of them say they plan to spend less this year on back-to-school shopping, continuing a commitment to frugality that has emerged during the current economic downturn.

Military shoppers are cutting back through a number of different strategies. The top methods identified by survey respondents include:

• Re-using supplies from past years (55 percent).
• Spending less on back-to-school clothes (52 percent).
• Not buying new electronics (50 percent).
• Shopping at discount stores (45 percent).
• Shopping for less expensive supplies (38 percent).
• Buying fewer school supplies (31 percent).
• Dressing children in hand-me-down clothing (19 percent).
• Buying items in bulk (19 percent).
• Having college children live at home (12 percent).
• Sharing supplies with other people (10 percent).

Notably, economic worries are clearly evident among those cutting back.  The Index reveals that 65 percent say they feel financially stretched month to month. Just 29 percent are extremely or very confident their financial situation will improve in the next year. Looking even further ahead, 28 percent are not confident in their ability to retire comfortably.

For many active-duty families these cost-cutting behaviors have become a way of life. Among those who plan to shop at discount stores, 42 percent say they have been employing this strategy for more than three years. A long-term commitment to frugality is also obvious among military families who plan to re-use school supplies from past years and spend less on back-to-school clothes (31 percent say they have been using these two strategies for more than three years).

“Active-duty families continue to respond to the lackluster economy and fears about pending military budget cuts with a commitment to frugal living,” said Scott Spiker, CEO of First Command Financial Services, Inc. “They are pursuing their long-term financial security through money-saving behaviors they’ve refined during the ongoing financial downturn. Back-to-school shopping is yet another occasion for military families to spend less, save more and reduce debt.”